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Homeownership

How to inform clients about scams that continue to victimize homebuyers

(HOMEOWNERSHIP) Real estate scams continue to victimize people, but Realtors are in a position to better protect homebuyers. Here are some tips.

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Despite warning after warning and news story after news story, homebuyers keep getting their money stolen in real estate wire transfer schemes. Some blame the mortgage and real estate industries for not doing enough to educate and protect their clients. Others say the people committing these crimes are getting more and more sophisticated. No matter who’s to blame, there’s no arguing that this crime is on the rise.

What exactly do these real estate scams look like? These criminals usually hack into a business’s emails, often a title company, and get all the pertinent information they need. They then steal and copy that company’s letterhead, and the email addresses, signature blocks and any other relevant information they will need to fool the homebuyer. The homebuyer then gets an email that appears to be from the title company, asking them to wire money, often tens or sometimes hundreds of thousands of dollars.

So, you’re probably wondering right now: What can I do? You want to know how to warn and protect your clients and keep your reputation intact (and avoid costly lawsuits). The following safeguarding tips can help keep cash out of cyberthieves’ hands:

1. Pick up the phone. If you’re closing on a home and receive an email with instructions on how to transfer money to your closing company or lender, take a few minutes to call your agent or broker to make sure it’s legit. Yes, this might be a bit annoying, but not as annoying as losing thousands of dollars in an email scam.

2. Be aware. These scammers usually send emails that look like the real thing. If you’re a homebuyer, look for weirdly timed emails (sent in the middle of the night) or spelling and punctuation errors. Is there a sense of urgency to the email?

3. Educate your clients. If you’re a real estate professional, make sure your clients know about this scheme. Not everyone is aware they could be a target (which is why it keeps happening). Set up a specific passcode for each client.

4. Consider using BuyerDocs and asking your title company to use this technology for all of their transactions.. What’s BuyerDocs, you ask? This tech startup provides secure document delivery for closing companies and homebuyers. The company says it has protected more than $5 billion in wire transfers in 2018 and works with big and small businesses across the country.

Scams will never be eradicated, but it is part of your job to know the current scams and how to protect transactions against shady folks.

Staff Writer, Krystal Hagan holds a bachelor of journalism from the University of Texas at Austin. She lives the full-time RV life just outside Austin, Texas, with her musician partner, three dogs, and a six-toed cat. In her free time, she binges TV shows, brandishes her otherwise useless pop-culture knowledge at trivia nights, and tries to become BFFs with every animal she meets.

Homeownership

Home sales dip 10%, inventory levels continue to plague the market

(HOMEOWNERSHIP) While demand for home sales has remained high, a lack of inventory means that numbers have continued to dip, according to the NAR.

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Home interior with gray couch, cactus pillows, and succulents on the coffee table in front of the couch.

In February, all regions experienced a decrease in pending home sales (contracts penned), according to the National Association of Realtors (NAR). Compared to January, sales fell 10.6%, and fell 0.5% from February 2020.

As with every real estate news story you’ve read here in recent years, NAR continues to point to tight inventory levels as the continuing plague on the market.

“The demand for a home purchase is widespread, multiple offers are prevalent, and days-on-market are swift but contracts are not clicking due to record-low inventory,” said NAR’s Chief Economist, Dr. Lawrence Yun.

He observes that overall demand does not appear to be impacted by mortgage rates trending upwards, expected to remain low at no more than 3.5% this calendar year.

It is interesting to note, however, that more expensive homes had increased sales activity because of “reasonable supply,” per Dr. Yun, adding that homes above the $250,000 mark have driven home sales in recent months.

That said, Dr. Yun indicates that even homes priced above $500,000 to less than $1 million are subject to the tight inventory challenges.

“Potential buyers may have to enlarge their geographic search areas, given the current tight market,” Dr. Yun noted. “If there were a larger pool of inventory to select from – ideally a five- or a six-month supply – then more buyers would be able to purchase properties at an affordable price.”

In past months, NAR has repeatedly pointed to the same solution to the inventory challenge – new home builders. If supply were increased and housing starts improved, demand would be more readily satiated and fewer people would be priced out of the market.

Economic conditions typically shift under any new President, and with an ongoing pandemic, we are watching for any signs of hope in a dark time. With building material costs continuing to increase, labor conditions in the sector remaining difficult, mortgage rates are rising (albeit slowly), inventory levels are not expected to immediately improve.

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Homeownership

Why realtors shouldn’t use the term ‘Starter Home’

(HOMEOWNERSHIP) You see the term in the MLS for fixer uppers, you hear it when Realtors are working with first time buyers. But the term “starter home” shouldn’t be in anyone’s vocabulary. Here’s why.

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starter homes debt existing home sales

Just words

Collins English Dictionary defines a starter home as a “small, new house which is cheap enough for people who are buying their first home to afford.” You won’t find the phrase too often outside of the real estate industry.

There isn’t much about the etymology of the phrase, but most likely, it’s a marketing ploy to get people to buy into the idea of purchasing another home in a few years.

Grind your gears

Mark Greutman, husband to Lauren Greutman, believes that the term “starter home” should bother people. The phrase implies that you will upgrade later.

Your starter home isn’t good enough for the rest of your life. And not to get into how well Americans have it, what about people who will never be able to afford anything more? Is it an insult to them?

Do you really need two living rooms?

Older generations bought one home and lived in it until they could no longer be independent. In today’s world, we buy a starter home, then upgrade to have more space, to live farther away from our neighbors, to have rooms that are only used once or twice a year, and to make sure you have a 2 or 3 car garage to hold your vehicles and more stuff, some of which isn’t taken out very often.

But consider this: You could pay off your starter home in 15 to 20 years, if you budget right.

You could be out from under a mortgage and have money to travel, send the kids to college, or even retire early. When you think about what led to the financial crisis in 2008, isn’t it better to have a smaller house where you can make the payments than worry about losing your house?

Be content where you are

Realtors are motivated to make sure that they have customers. If people buy one home with the intent to stay, will the market dry up? Probably not, because people move and a new generation will be ready to purchase homes for their own family.

Let’s think about that phrase, “starter home.” It fuels consumerism and discontentment. Don’t call cheaper houses starter homes, but just a home.

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Homeownership

Hilarious things left behind when people move out of their house

(HOMEOWNERSHIP) People often forget what changes and additions they’ve made to a house until it is too late. This Twitter thread is a hilarious reminder to take everything with you when you leave.

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There are moments when social media brings people together and gives us comedy gold. Have you ever left something behind when you moved, something that while maybe not so crucially important to you, will definitely offer an interesting insight into your life? Such as a message written behind a wall, or a note hidden in an air duct? Well a twitter thread posted earlier this week opened up Pandora’s box for amusements on this topic and some of these are just getting stranger and stranger.

The original poster, @KaylaKumari, brought it up originally when she asked her mother, who had just recently moved out of her last home, if she’d uninstalled the special fire alarms that she recorded in her voice yelling, “GET OUT OF THE HOUSE BECAUSE MOM’S CANDLES CAUGHT THE HOUSE ON FIRE”. A perfect line, short and succinct. Now some poor family is going to have a fire and some woman’s voice will be ushering them out instead of an alarm. Hopefully there won’t be too much confusion there.

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My parents sold their house like a month ago but my mother JUST realized she did not uninstall the special fire alarms she had put in that are a recording of her own voice screaming at me and my sister to “GET OUT OF THE HOUSE BECAUSE MOM’S CANDLES CAUGHT THE HOUSE ON FIRE”

After that, the tweets and retweets just kept coming. Some of them mostly relating to habits or forgotten moments. In four days, the post has gotten over 17K retweets and/or comments and some of these are gems.

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A lot of people seem to enjoy feeding wildlife as well. Lots of fun shocks to go around. I would recommend however, to disclose that upon sale of the house so you don’t get sued. But this just goes to show that social media can be nice sometimes. A nice uplifting moment in our days.

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